An article in the Economist and an opinion piece in Investor's Business Daily make a similar claim: the US does a lousy job of attracting entrepreneurs and making it easy for them to start a business.
The simplest leading indicator for job creation is start up activity. Jobs reports are caused by start ups and expansions. Any administration wanting to lower unemployment will make it easy for entrepreneurs to start companies.
When I wrote my book about the emerging entrepreneurial economy, I assumed that Silicon Valley was just one bit of evidence that the US led the world in creating conditions for traditional entrepreneurship. It seemed to me that the US had largely pioneered this matter of traditional entrepreneurship. For me, the next big hurdle was within corporations, getting them to create conditions within that they sought without. That is, making employees more entrepreneurial, offering them similar autonomy and rewards that countries offer entrepreneurs. But it seems as though I've overlooked something: the US is hardly doing all it can to encourage traditional entrepreneurship.
While it is true that we've learned a great deal about traditional entrepreneurship, it would seem that we're not so particularly good at applying that. By contrast, we don't know that much about how to make employees more entrepreneurial: we'll have to invent our way through that. I understand not trying things we don't yet know; I still don't understand not doing things that we've already proven. I still believe that we'll need to transform the corporation so that it creates entrepreneurs rather than just manages knowledge workers, but it's less obvious how that is going to happen in an environment in which traditional entrepreneurship is neglected.
If there was one silver bullet that Obama could use for the economy, it would be entrepreneurship. Entrepreneurs create wealth (something that could neatly offset excessive debt) and jobs (something to neatly offset unemployment). Why Obama wouldn't do all he could to encourage entrepreneurship escapes me.
Excerpts from the articles here:
Investor's Daily editorial:
According to the Census Bureau, the startup rate, measured as a share of all firms, has plunged to 7% from 9% in 2008 and from 11% in 2006. The pace, moreover, is almost half the 1980s' peak of 13%.Economist article:
Entrepreneurs started 544,109 new firms in 1987 compared with 394,632 in 2010 — a drop of 28%.
MOST governments say they want to encourage entrepreneurs. Yet when foreigners with ideas come knocking, they slam doors in their faces. America, surprisingly, is one of the worst offenders. It has no specific visa for foreigners who wish to create new companies. It does offer a visa for investors, but the requirements are so stiff—usually an initial investment of $1m, or half that if the firm is in a depressed neighbourhood—that the annual quota of 10,000 visas is seldom filled.
America’s scorn for skills is extraordinary. The share of permanent visas granted for economic reasons (as opposed to kinship) fell from 18% to 13% between 1991 and 2011. In Canada it rose from 18% to 67%.